Sam Bankman-Fried allegedly used $100 million in funds he stole from his customers to make political campaign contributions
Sam Bankman-Fried has been charged by the US Department of Justice’s Criminal Division for using more than $100M in illegal campaign funding.
Federal prosecutors said the money was paid in hopes of influencing rules over cryptocurrency.
Sam Bankman-Fried in hot water
Federal prosecutors have filed an indictment accusing 31-year-old former billionaire Sam Bankman-Fried of misappropriating customers’ funds. The indictment noted that SBF gave directives to two FTX executives to exceed contribution limits and donate to Republican and Democrats candidates. The executives were to conceal the source of the funds.
Bankman-Fried is charged with seven counts of conspiracy and fraud over FTX’s collapse. His criminal fraud trial is still pending to begin in October.
“He leveraged this influence, in turn, to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow,” the indictment said.
Sam Bankman-Fried was one of the largest donors to the American midterm elections. He donated across party lines, even making a $5.2M donation to the Joe Biden’s Presidential campaigns
The filing also noted that during the eve of the fall of FTX, the disgraced founder made false reassurances to customers in hope to retain deposits by slowing withdrawals.
The new management of the exchange threatened legal action against anyone who refused to return the donations last year.
FTX, an empire of facade
FTX went bust in November 2022, but the disgraced founder, Sam Bankman-Fried was jailed yesterday after his $250M bail was revoked.
Judge Lewis Kaplan found Sam Bankman-Fried to have committed witness tampering and remanded him.
The MIT graduate previously said he gave money to Democrats but after the collapse of FTX, he admitted that he also funded Republicans.
These charges are the latest in a long line of indictments against SBF. Federal prosecutors had initially charged him with eight counts of fraud at FTX in December 2022. In February 2023, a superseding indictment was filed with 12 counts. Then another was filed in March with 13 counts, adding one count of allegedly bribing a Chinese official.
SBF rode the crypto boom but built an empire of lies that soon crashed. The former FTX founder was banking on campaign funding tactic to weed out anti-crypto politicians.
The indictment also alleges he “used these connections with politicians and government officials to falsely burnish the public image of FTX as a legitimate exchange.”
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